Enbridge Pipelines (Illinois), L.L.C. v. Troyer

Illinois Official Reports
Appellate Court
Enbridge Pipelines (Illinois), L.L.C. v. Troyer,
2015 IL App (4th) 150334Appellate Court ENBRIDGE PIPELINES (ILLINOIS), L.L.C., n/k/a ILLINOIS
Caption EXTENSION PIPELINE COMPANY, L.L.C., Plaintiff-Appellee, v.
LESLIE DEAN TROYER, MARY TERESA TROYER, FIRST
NATIONAL BANK OF SULLIVAN, as Mortgagee, and
NON-RECORD CLAIMANTS and UNKNOWN OWNERS,
Defendants-Appellants.
District & No. Fourth District
Docket No. 4-15-0334
Filed September 22, 2015
Rehearing denied October 21, 2015
Decision Under Appeal from the Circuit Court of McLean County, No. 14-ED-12; the
Review Hon. Paul G. Lawrence, Judge, presiding.
Judgment Affirmed.
Counsel on Thomas J. Pliura, of LeRoy, for appellants.
Appeal
John Spesia and Jacob E. Gancarczyk, both of Spesia & Ayers, of
Joliet, and Gerald A. Ambrose, Angelo J. Suozzi, and William B.
Bruce, Jr., all of Sidley Austin LLP, of Chicago, for appellee.
Panel PRESIDING JUSTICE POPE delivered the judgment of the court,
with opinion.
Justices Holder White and Steigmann concurred in the judgment and
opinion.
OPINION
¶1 Plaintiff, Enbridge Pipelines (Illinois), L.L.C., now known as Illinois Extension Pipeline
Company, L.L.C. (IEPC), obtained eminent-domain authority from the Illinois Commerce
Commission (ICC) over certain real property upon which it is constructing a liquid petroleum
pipeline. Multiple landowners have been subject to IEPC’s eminent-domain authority.
Defendants (Landowners) in this matter are landowners in McLean County who have been
unable to reach an agreement with IEPC on the amount of just compensation to be paid and
are scheduled for jury trials later this year on that issue. In April 2015, IEPC sought and
received an injunction granting it the right to access the permanent and temporary easements
it obtained in condemnation proceedings so it can begin construction of the pipeline on
Landowners’ tracts. Landowners filed the instant interlocutory appeal asking this court to
dissolve the injunction until the juries have determined the just compensation due and said
compensation has been paid by IEPC. We affirm the trial court’s order granting IEPC access
to the real estate so it can construct the pipeline.
¶2 I. BACKGROUND
¶3 In August 2007, IEPC filed an application for a certificate in good standing and other
relief pursuant to section 15-401 of the Common Carrier by Pipeline Law (Pipeline Law)
(220 ILCS 5/15-401 (West 2006)). IEPC’s application sought approval from the ICC to
construct and operate a liquid petroleum pipeline project named the “Southern Access
Extension” (SAX). IEPC described the proposed extension as a 36-inch-diameter
underground pipeline that would originate from its Flanagan terminal located near Pontiac,
Illinois, and terminate approximately 170 miles south at its Patoka terminal located near
Patoka, Illinois. IEPC’s application also sought to acquire, when necessary, easements on
private property to construct the SAX pipeline pursuant to eminent domain, as authorized by
section 8-509 of the Public Utilities Act (Act) (220 ILCS 5/8-509 (West 2006)).
¶4 In July 2009, the ICC issued an order in docket No. 07-0446 granting IEPC’s application
for a certificate in good standing, which effectively authorized construction of the SAX
pipeline. The ICC, however, denied IEPC’s request for eminent-domain authority, urging
instead that IEPC continue negotiations with landowners who declined the compensation
IEPC offered in exchange for an easement on the landowners’ properties. Despite its denial,
the ICC stated, “in the event [IEPC] is still unable to obtain the necessary easement rights
through the negotiation process, it can renew its request for authority to exercise
eminent[-]domain authority by *** demonstrating that it has made reasonable attempts to
obtain easements, through good-faith negotiations.”
¶5 Intervenors appealed the ICC’s order granting IEPC a certificate in good standing, and
this court affirmed. Pliura Intervenors v. Illinois Commerce Comm’n, 405 Ill. App. 3d 199,
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200, 942 N.E.2d 576, 578 (2010). In January 2011, the Supreme Court of Illinois denied
Intervenors’ petition for leave to appeal. Pliura Intervenors v. Illinois Commerce Comm’n,
239 Ill. 2d 589, 943 N.E.2d 1108 (2011).
¶6 In July 2013, IEPC filed a petition renewing its request for eminent-domain authority
under section 8-509 of the Act. IEPC sought to apply that authority to 148 of the 680 tracts of
land comprising the SAX pipeline project route, claiming further negotiations with the
owners of those respective properties would be futile.
¶7 In April 2014, the ICC granted IEPC the right to exercise eminent domain, subject to
certain conditions not relevant here. This court affirmed the ICC’s grant of eminent domain
in May 2015. See Pliura Intervenors v. Illinois Commerce Comm’n, 2015 IL App (4th)
140592-U.
¶8 On March 26, 2015, IEPC filed a motion seeking to enjoin Landowners from interfering
with its access to the tracts of real estate at issue so IEPC would be able to construct the
pipeline in an efficient, effective, and timely manner. IEPC’s verified motion set forth the
following:
(1) The pipeline, an $800 million project, is scheduled to be in service in
December 2015. To achieve that in-service date, IEPC must adhere to an intricate,
interrelated construction schedule consisting of a carefully orchestrated series of tasks
to be performed in a specific order by specialized crews and equipment, sequentially
through the relevant tracts.
(2) Timely completion of the project is necessary for IEPC to fulfill its contractual
obligations.
(3) Landowners have refused to allow IEPC access to their tracts, despite IEPC’s
clear right to construct the pipeline on those tracts.
(4) If the construction process is disrupted and fragmented by lack of access to
certain tracts, if may be necessary to employ time-consuming and expensive
move-around techniques. A single substantial skip along the route can easily result in
as much as $500,000 or more in increased construction costs as well as significant
delays in workflow due to repeated relocation of personnel and equipment.
(5) In addition to the significant lost revenue resulting from construction delays,
any delay in the in-service date would significantly impair the reputation of IEPC and
its affiliated Enbridge entities for reliability and dependability as
common-carriers-by-pipeline.
(6) Landowners’ only remaining issue in the litigation is the amount of just
compensation to be paid by IEPC for access to the tracts.
(7) IEPC will deposit with the court the full amount of the compensation awards
sought by Landowners for the value of the easements and a bond to cover all alleged
damages to the remainder. (IEPC’s motion makes clear it believes the actual values
are much lower than Landowners have calculated, it expects the jury verdicts to be
much lower than the amounts sought, and if the jury awards less than the amount
IEPC deposits with the court, IEPC is entitled to have the remaining balance
returned.)
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(8) IEPC has no adequate remedy at law because it has no recourse against any
party for the increased costs, loss of revenue or customers, or damage to its
reputation.
(9) Landowners will suffer no harm because the deposited funds are sufficient to
cover the values of the easements demanded by them.
¶9 Landowners contended IEPC does not have a right to access the tracts until a jury
determines the amount of just compensation due and that amount is paid by IEPC.
¶ 10 On April 20, 2015, the trial court issued a written order granting IEPC access to
Landowners’ tracts. The court found (1) IEPC established it had a clear and certain right in
Landowners’ property to construct, operate, and maintain a pipeline; (2) its right was in need
of protection; (3) absent an injunction, IEPC would suffer immediate and irreparable harm;
(4) there was no remedy at law, as Landowners even admitted; (5) IEPC had already
succeeded on the merits of the litigation, only the issue of “just compensation” remained to
be determined; (6) through a variety of methods, IEPC had succeeded in obtaining access to
approximately 650 of the 680 tracts needed to construct the pipeline. The McLean County
tracts were “all that remain between start and finish of the route”; (7) under these
circumstances, Landowners’ tracts are a barrier to the timely completion of the pipeline
project and are being used to delay a project determined by the ICC to be needed in the
public interest; and (8) the public interest in an adequate and dependable supply of refined
petroleum products, as determined by the ICC in its certification order, requires an adequate
transport infrastructure for crude petroleum and the timely completion of IEPC’s project
serves that interest and weighs in favor of the injunction.
¶ 11 The trial court granted IEPC’s motion and ordered Landowners to refrain from impeding
IEPC’s access to the subject tracts for the purpose of constructing, operating, and
maintaining the pipeline. The court directed IEPC to deposit $1.7 million with the McLean
County treasurer to cover the maximum amounts Landowners claimed for the permanent and
temporary easements. The court also required IEPC to post a surety bond in the amount of
$27 million to secure Landowners’ claims for any damages to the remainder.
¶ 12 This appeal followed.
¶ 13 II. ANALYSIS
¶ 14 Landowners appeal from the grant of injunctive relief, contending the trial court abused
its discretion in granting IEPC access before just compensation was determined and paid.
This court has jurisdiction pursuant to Illinois Supreme Court Rule 307(a)(1) (eff. Feb. 26,
2010) (an appeal may be taken from an interlocutory order granting an injunction). We
review the decision to grant an injunction for an abuse of discretion. Roxana Community Unit
School District No. 1 v. WRB Refining, LP, 2012 IL App (4th) 120331, ¶ 27, 973 N.E.2d
1073 (“We review a trial court’s decision granting or denying a preliminary injunction for an
abuse of discretion, which occurs only when its ruling is arbitrary, fanciful, or unreasonable,
or when no reasonable person would adopt the court’s view.” (Internal quotation marks
omitted.)).
¶ 15 Landowners also contend the trial court had no legal authority to support its decision to
grant access to IEPC before a jury determined just compensation and IEPC paid that amount
to Landowners. As a legal question, we review this issue de novo. See Clinton Landfill, Inc.
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v. Mahomet Water Valley Authority, 406 Ill. App. 3d 374, 378, 943 N.E.2d 725, 730 (2010);
Advanced Imaging Center of Northern Illinois Ltd. Partnership v. Cassidy, 335 Ill. App. 3d
746, 748, 781 N.E.2d 664, 666 (2002).
¶ 16 A. Trial Court Had Equitable Authority to Issue a Preliminary Injunction
¶ 17 We turn to the legal question first, because if the trial court did not have legal authority to
issue an injunction, we need not determine whether it abused its discretion in doing so. A
court would have no discretion to issue an injunction without legal authority.
¶ 18 Both parties cite Forest Preserve District v. West Suburban Bank, 161 Ill. 2d 448, 641
N.E.2d 493 (1994), as support for their respective positions. In that case, the trial court issued
a preliminary injunction to prevent the bank from constructing a parking lot on land subject
to condemnation proceedings. The forest preserve district (District), like IEPC here, did not
have “quick take” powers. Id. at 450, 641 N.E.2d at 494. The purpose of the condemnation
proceeding was to preserve flora and fauna on the property. In issuing a preliminary
injunction, the court found the District was likely to succeed on the merits because it had a
statutory right to condemn the property. Id. at 451, 641 N.E.2d at 495. The court also found
the District had no adequate remedy at law because the property would sustain irreversible
damage and the cost of restoration would exceed the original purchase price of the land. Id. at
451-52, 641 N.E.2d at 495. The order enjoined the defendants from any construction on the
property but allowed the defendants to continue farming the property, to perform
maintenance on an existing wash pit, to erect a soil erosion fence, and to continue parking
equipment on the property. Id. at 452, 641 N.E.2d at 495.
¶ 19 The appellate court reversed, finding the request for an injunction in the condemnation
proceeding amounted to a “quick take” of the property, exceeding the District’s
condemnation authority. Id. The supreme court reversed the appellate court, finding the
injunction did not amount to a “quick take” of the defendants’ property because it did not
grant the District title or possession of the property. Id. at 453-54, 641 N.E.2d at 496. As the
supreme court noted, “[i]n an ordinary condemnation proceeding, a landowner continues to
enjoy title and possession of the land pending a final determination of just compensation and
the deposit of that amount for his benefit.” Id. at 453, 641 N.E.2d at 496.
¶ 20 In the case at bar, the condemnation proceeding does not fit into the category of an
“ordinary” condemnation proceeding as described above. Landowners retain both title to and
possession of their tracts. When these proceedings terminate, Landowners will continue to
hold title and possession of their tracts. The injunction simply prevents Landowners from
impeding IEPC’s access to the tracts for the purpose of installing, operating, and maintaining
a pipeline, rights which have been approved by the ICC and upheld by this court. As in West
Suburban Bank, “[t]he injunction did not radically curtail defendants’ right to use the
property or deprive defendants of all economically viable use of the property.” Id. at 457, 641
N.E.2d at 497. There the defendants continued to have the right to farm and store equipment
on the property, just as Landowners do here. As a result, since the injunction did not deprive
the defendants of all economically viable use of the property, it did not amount to a
regulatory taking. Id. As the supreme court specifically noted, in the context of condemnation
proceedings, a preliminary injunction cannot be considered a taking without compensation,
as the very purpose of a condemnation proceeding is to determine the amount of just
compensation constitutionally owed to the landowner. Id. See also Northern Border Pipeline
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Co. v. 64.111 Acres of Land, 125 F. Supp. 2d 299 (N.D. Ill. 2000) (where parties agreed
plaintiff had no statutory authority to immediate possession of the property, court
nevertheless found it had equitable power to issue preliminary injunction granting possession
even though just compensation had yet to be determined).
¶ 21 Landowners refer to the preliminary injunction as an unconstitutional taking. They fail to
develop this argument at all as required by Illinois Supreme Court Rule 341(h) (eff. Feb. 6,
2013), and thus, they have forfeited it. See Sakellariadis v. Campbell, 391 Ill. App. 3d 795,
804, 909 N.E.2d 353, 362 (2009). Nevertheless, we point out the constitution “ ‘does not
require just compensation be paid in advance of, or even contemporaneously with, the
taking.’ ” West Suburban Bank, 161 Ill. 2d at 458, 641 N.E.2d at 498 (quoting Beverly Bank
v. Illinois Department of Transportation, 144 Ill. 2d 210, 229-30 (1991), citing Williamson
County Regional Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 194 (1985)) (noting our
supreme court interprets the present state constitutional protection against taking property
without just compensation in the same way as quoted above).
¶ 22 The supreme court in West Suburban Bank went on to state, even if the preliminary
injunction constituted a taking, because the defendants were engaged in an adequate process
for receiving just compensation for their property, immediate payment of compensation was
not required. Id.¶ 23 In the case at bar, the ICC granted eminent-domain authority to IEPC, and this court
affirmed the grant of that power. Pliura Intervenors, 2015 IL App (4th) 140592-U. Thus,
IEPC has established its condemnation rights. Nothing remains to be done but to set just
compensation.
¶ 24 As noted above, this is not an ordinary condemnation case. Landowners retain title to
their land and will still retain title when these proceedings finally come to an end.
Landowners also retain possession of the real estate and will still retain possession when
these proceedings finally end. Under these circumstances, the trial court retained its equitable
authority to order Landowners not to impede IEPC’s access to their property for pipeline
purposes. In addition, as discussed more fully below, the court took steps to protect
Landowners by requiring IEPC to deposit with the county treasurer $1.7 million and a $27
million surety bond.
¶ 25 B. Trial Court Did Not Abuse Its Discretion in Granting the Injunction
¶ 26 Based on the facts outlined above, the trial court correctly weighed the factors which
determine whether an injunction should issue. A preliminary injunction may issue if “(1) a
clearly ascertainable right requires protection, (2) irreparable injury will result in the absence
of an injunction, (3) no adequate remedy at law is available, and (4) the moving party is
likely to succeed on the merits of the case.” Roxana Community Unit School District No. 1,
2012 IL App (4th) 120331, ¶ 23, 973 N.E.2d 1073 (citing Clinton Landfill, Inc., 406 Ill. App.
3d at 378, 943 N.E.2d at 729). A preliminary injunction should issue only if the harm to the
plaintiff in the absence of such relief likely outweighs the harm to the defendant if the relief
is granted. Id.
¶ 27 Here, IEPC had clearly established its rights in Landowners’ properties by obtaining a
certificate to build the pipeline from the ICC, as well as the right of condemnation. As noted
above, this court affirmed both of those rights. Further, due to the intricate scheduling,
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sequential moving parts, deadlines, et cetera, IEPC proved it would suffer irreparable
financial harm for which it could not seek recompense, as well as harm to its reputation as a
certificated common-carrier pipeline company. IEPC has already succeeded on the merits of
the condemnation proceeding. It has the right to build the pipeline on the subject tracts, and
the issuance of the injunction granting access protects that right.
¶ 28 Further, IEPC offered, and the trial court required it, to deposit enough cash ($1.7
million) to cover the full amount claimed by Landowners as the value of their easements.
IEPC also posted a $27 million surety bond to cover any damages to the remainder. The
amount of just compensation will be decided by a jury, but clearly IEPC has the wherewithal
to fully compensate Landowners for any amount the juries may assess. Further, IEPC agreed
the trial court can allow Landowners access to the funds deposited with the treasurer upon
application and a hearing. Thus, the funds are available to Landowners prior to any
determination of just compensation.
¶ 29 We find the trial court, under the circumstances here, did not abuse its discretion in
granting IEPC an injunction to prevent Landowners from impeding IEPC’s access to
construct, operate, and maintain the pipeline on Landowners’ tracts.
¶ 30 III. CONCLUSION
¶ 31 In balancing the hardships to the parties and considering the appropriate factors in
making the decision to grant IEPC access to Landowners’ tracts, as well as requiring the
posting of sufficient funds and security to ensure just compensation will be paid, the trial
court did not abuse its discretion by issuing an injunction to allow IEPC access without
impediment by Landowners.
¶ 32 We affirm the trial court’s judgment.
¶ 33 Affirmed.
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